Over the past half century, strategy has become the primary mechanism senior company leaders use to make decisions about the future of their business and design their gameplan for success. During that period, the strategy discipline has assimilated many marketing principles, methods, and tools into the strategy development process.
This post discusses why the assimilation occurred and why it isn’t necessarily a bad thing.
Just over five years ago, Roger L. Martin, the co-author of Playing to Win: How Strategy Really Works, wrote that marketing and strategy have become one discipline. He reiterated his position earlier this year.
Martin argued that, during its formative years, the marketing discipline was primarily focused on the interactions between a company and customers. Competitors weren’t completely absent from marketing, but they weren’t a primary focus.
Meanwhile, during its early years, the business strategy discipline was primarily focused on the interactions between a company and its competitors, with little attention being given to customers.
Martin gives Michael Porter credit for triggering the intellectual convergence of marketing and strategy. In his two seminal books, Competitive Strategy (1980) and Competitive Advantage (1985), Porter identified differentiation as one of his three generic strategies.
To successfully implement a differentiation strategy, company leaders must deeply understand their customers, and that requirement, Martin wrote, “brought customers formally into the strategy equation.”
Martin argued that the evolution of both disciplines has made marketing and strategy virtually “indistinguishable.” He wrote:
“The full addition of competitors to the marketer’s focus and of customers to the strategist’s focus has caused the jobs of marketers and strategists to converge on the same thing . . . They now have the same job – just with different titles.”
Overlapping Issues, Principles, Tools, and Processes
I don’t think marketing and strategy have converged quite as much as Martin suggests – at least not yet. But, there is no doubt that both disciplines now deal with many of the same issues and use many of the same principles, tools, and processes, as the following diagram illustrates.
This diagram shows that several consequential business issues, decisions, and actions now reside in both disciplines. But, the diagram doesn’t tell the whole story.
Strategy Has Assimilated Many Aspects of Marketing
As I noted earlier, the seminal work of Michael Porter in the early 1980’s made customer-related issues an integral part of the strategy discipline. Over the ensuing four decades, the strategy discipline has assimilated many marketing principles and methods and incorporated them into the strategy development process. Think of the Borg in “Star Trek.”
As a result, many core marketing concepts and practices, such as market segmentation, targeting, and customer needs analysis, are now widely seen as essential elements of the strategy development/strategic management process. In essence, the evolution of the strategy discipline over the past 40-plus years has transformed numerous important marketing concepts and actions into strategy concepts and actions.
Several marketing scholars have expressed views about the relationship between strategy and marketing that aren’t too dissimilar from Roger Martin’s.
For example, in an article appearing in the Journal of the Academy of Marketing Science, George S. Day, now the Geoffrey T. Boisi Professor Emeritus at the Wharton School of the University of Pennsylvania, wrote:
“Paradoxically, the deeper marketing is embedded within an organization and becomes the defining theme for shaping competitive strategy, the more likely is the role of marketing as a distinct function to be diminished . . . Perhaps marketing and strategic planning will merge into a single core function responsible for keeping the firm focused on the changing marketplace . . . In this scenario, the responsibility for understanding customers and making sure the firm delivers superior value to them will become part of everyone’s job description.”
Ironically, this is close to the outcome Peter Drucker had in mind in 1973 when he wrote:
“Marketing is so basic that it cannot be considered a separate function . . . it is, first, a central dimension of the entire business . . . Concern and responsibility for marketing must, therefore, permeate all areas of the enterprise.”[1]
Assimilation Isn’t Necessarily Bad
The assimilation of marketing principles and methods into the strategy discipline isn’t necessarily a bad thing. It can, in fact, be a net positive for a company if the “assimilated” marketing concepts and methods are used correctly. Here’s why.
First, when a company’s strategy-makers incorporate marketing principles and methods into their strategy development process, the resulting business strategy is more likely to embody a sound market and customer orientation.
And second, business strategy is usually formulated by the CEO and other members of a company’s top management team, and these senior executives will typically make a concerted effort to ensure their chosen strategy is instilled in all parts of their organization. Therefore, when a market and customer orientation is embedded in a company’s business strategy, there is a greater likelihood such an orientation will, in Drucker’s words, “permeate all areas of the enterprise.”
Top image courtesy of JamesinOregon via Flickr (CC).
[1] Drucker, Peter F., Management Tasks, Responsibilities, Practices (Harper & Row, Publishers, Inc., 1973).
